More fairies and unicorns from Trump’s economic advisor Kevin Hassett. Hassett made an appearance on Fox’s Sunday Morning Futures with Maria Bartiromo, and after first gushing about how much AI is helping a lot of businesses with their bottom line, pretended that gas prices are going to plummet before the midterms get here when there’s no hope in sight of the Strait of Hormuz opening any time soon, Hassett predicted GDP growth of “4, 5, or even 6 percent.”
This is the same guy who was just telling us how wonderful everything is because people were running up their credit cards buying gas. Now he’s pretending profitability for corporations translates to making working people’s lives better before using a whole bunch of fuzzy math to exaggerate GDP growth.
BARTIROMO: What is driving the economy, and how would you assess growth in the U.S. right now?
HASSETT: There’s a huge difference between what we’re seeing in the market right now and what we saw back in the ’90s — what they called the dot-com bubble. What’s happening now is that AI is being folded into the operations of so many companies that they’re seeing their profitability, revenues, and even employment skyrocket.
We’ve had a couple of quarters in a row where earnings surprised to the upside more than they ever have. That’s why equity markets are going up — because in the end, it’s earnings that determine what the price should be. There’s an earnings boom going on unlike anything we’ve ever seen.
BARTIROMO: In terms of the price of oil and gas — this spike has to mean higher costs for corporate America and consumers.
HASSETT: It does in the short run. Secretary Bessent, who follows these numbers closely — and who made a lot of money trading on them in the past — says the futures markets are signaling that once we get the strait open, there’s going to be a gusher of oil released from the Gulf, and that’s going to help bring prices down relatively quickly.
There’s a bit of a time lag, of course. We’ve got to get the tankers moving from the Persian Gulf to Asia especially, where jet fuel prices are so high, and that can take a month or two. But once that gusher opens, we expect oil prices could drop relatively quickly — certainly ahead of the election.
BARTIROMO: What kind of economic growth would you expect for ’26 and beyond? Let’s assume we get out of this war fairly soon. What GDP growth number would you expect for the U.S. economy?
HASSETT: That’s something we’ve been working on a lot lately, because of the capital spending boom. In March, capital spending went up 3.3 percent — not at an annual rate. Multiply that by 12 and you’re looking at historic numbers. President Trump’s tax cuts, which allow full expensing, combined with on-shoring activity, are giving us a capital spending boom unlike anything we’ve ever seen.
If you look at how fast the capital stock — essentially the productive assets we use to make things — is growing, it’s between five and eight percent right now. Divide that by three and you get a rough estimate of the GDP growth generated by capital spending alone. Add productivity growth at two and a half percent, and I think we could really be looking at numbers north of four, five, or even six percent, given how much capital stock growth is underway.
Keep in mind: the 2 percent GDP growth figure we recently saw was held down partly because we imported a record number of capital goods to build all these new factories. Once those factories come online, you’re going to see growth unlike anything we’ve seen before.
As Manufacturing Drive reported, clean energy projects are actually being canceled thanks to this administration, with manufacturing construction spending declining after peaking in 2024:
The latest report from E2 shows that in 2025, companies canceled over $32 billion worth of clean energy manufacturing projects due to reduced government incentives and funding cuts, as well as tariff policies.
More on that here: Companies Announce $550 Million for Clean Energy Manufacturing Projects in November, Cancel $575 Million as Losses Continue to Outpace New Investment:
Businesses cancelled the fewest investments in large-scale factories and clean energy projects in over a year last month but losses continued to outpace new project announcements, according to E2’s latest monthly analysis of clean energy projects tracked by E2. Companies announced $550 million in investments for five new manufacturing projects in November but cancelled another $575 million for a battery storage project in Missouri — the fewest private sector projects and investments abandoned in a month since last November.
According to the analysis, cancellations, closures, and downsizes are outpacing new project investments and jobs nearly three to one in 2025. More than $32 billion in investments and nearly 40,000 jobs have been abandoned in 2025, compared to less than $12 billion and 19,000 new jobs announced. One key factor in the slowdown of new announcements is the Trump administration’s nearly year-long freeze of approvals for major onshore wind and solar projects.
While the five new investments were not enough to offset the loss of investment from November’s lone cancellation, the new projects are estimated to create at least 1,500 new jobs once completed compared to the 150 jobs cancelled. Georgia now leads the U.S. in announced projects after three projects were unveiled last month, expected to create 700 jobs and invest $63 million. First Solar’s $330 million new solar module manufacturing plant in South Carolina led new announcements in both jobs and investment.